Argentina has fixed the price of oil received by drillers at $56, far below international levels, as it scrambles to stop inflation getting further out of control after this week’s currency devaluation, according to two people familiar with the matter.
Crude drillers in burgeoning shale patch Vaca Muerta will get $56 a barrel until Oct. 31. Argentine oil prices were already decoupled from global markets, but Thursday night’s decision means shale companies will receive 11% less than the $63 at which local light crude was trading in the second quarter. The new price is also a big deviation from Brent, which is hovering at $83.
Argentina has frozen fuel prices at the pump after refiners, including market leader state-run YPF SA, hiked by 12.5% this week in the wake of a slump in the peso. But interventions like this one have held back the region, whose crude production of nearly 400,000 barrels a day pales in comparison to rival shale formations in the US.
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